Transnet is South Africa's state-owned freight transport and logistics company. The presentation outlines Transnet's strategy and digital transformation journey. It discusses Transnet's growth path over the past decades through various investment strategies. The current strategy, called Transnet 4.0, aims to deliver 8.5% annual growth through organic and inorganic means like expanding into liquids and gas, digital services, freight solutions, advanced manufacturing, and infrastructure development. Transnet is developing a digital business to offer customers value-added digital products and services that provide supply chain visibility, optimize logistics, and enhance responsiveness through a single portal. The digital transformation is positioned to improve complex logistics chains and keep Transnet competitive in the 4th industrial

1. ITA Future of Technology Conference I 17 May 2018
Digital Journey of Transnet
Presenter: Mandla Mkhwanazi, Digital Business Leader

2. 1Strictly private and confidential
Outline
Transnet Strategy History
MDS
Transnet 4.0
Transnet Digital Business

3. 2Strictly private and confidential
Recap of Transnet growth path
• Diversification of
Revenue Streams
• Geographic
Expansion
• Digital
Transformation
Key investments
• DDOP Phase 1
• Inland Terminals
• Gas Infrastructure
Networks
• Focused investment
in emerging
markets
2020-2027
Transnet 4.0
2012-2019
Market Demand
Strategy (MDS)
Quantum Leap
2008-2011
4-point Turnaround
Plan
2005 - 2007
Pre 2005
Pre 4-point
Turnaround Plan
▪ Accelerated
investment
▪ Create capacity to
satisfy market
demand
Key investments
▪ Rolling stock
recapitalisation
(Replacement
Strategy)
▪ GFB 88 – 180mt
▪ Mn – 16mt
▪ Coal – 97mt
▪ Ore – 72mt
▪ NMPP Phase II
▪ Richards Bay
expansion
▪ DDOP land
▪ Volume growth
▪ Improve financial
performance
▪ Steadily increasing
rate of investment
Key investments
▪ NCT
▪ Ore Line – 60mt
▪ Durban port
refurbishment
▪ 50 EMD locos for
GFB
▪ Business
reengineering
▪ Corporate
governance
▪ Culture change
Key investments
▪ CTCT
▪ Ore Line – 47mt
▪ Coal Line
▪ Locos – 110 dual
voltage coal line
▪ NMPP
▪ DHEW
▪ Port of Ngqura
▪ Redirecting business
▪ Restructure balance
sheet
Key investments
▪ Ore Line – 41mt
▪ Durban 2005
▪ Ngqura Basic Port
Infrastructure
Financial stability Building platform for growth Diversification and expansion

4. 3Strictly private and confidential
Outline
Transnet Strategy History
MDS
Transnet 4.0
Transnet Digital Business

5. 4Strictly private and confidential
Market Demand Strategy (MDS)
 R300bn capital investment programme
 Expanding rail, port and pipeline infrastructure
 Increase in capacity to meet market demand
 Continued financial stability and strength
 Significant productivity and operational efficiency improvements
 Shift from road to rail – reducing the cost of doing business and carbon emissions
 Enabling economic growth
 Job creation, skills development, localisation, empowerment and transformation opportunities

6. 5Strictly private and confidential
Regional integration of the freight system and greater global
connectivity is a key priority
 Grow Transnet footprint in the
region
 Pursue options to invest in
port, rail and pipeline
operating concessions
 Transnet International
Holdings established
 Transhipment revenue to more than double over 7 years
 Focus on port alliances, coastal shipping market growth
and linkages with rail corridors
 Increase cross-border rail
volumes by 60% over the next 7
years
 Focus on Maputo, North-South
and East-West Corridors
 Set up “Joint Operating Centres”
and inter-rail agreements to
improve corridor efficiency
 Increase export sales to R2,9 billion p.a. by 2022/23
 Position Transnet Engineering as preferred OEM for Africa
 Launched the “Trans-Africa” locomotive in 2017
Transnet
International
Strategy
Transnet is the
leading logistics
service provider in
Africa and the
Middle East

7. 6Strictly private and confidential
Government
departments
Regulators
Investors
Key customers Labour unions
Transnet
Suppliers
Greater collaboration
thereby creating and
enabling environment for
successful execution of
MDS
Continued support
and access to cost
effective funding to
meet requirements
Alignment and collaboration on
growth and expansion plans and
conversion to Take-or-Pay
contracts
Labour stability to support execution
and competitiveness of SA freight
logistics system
Partner with Transnet to
deliver capital spend and
achieve localisation and
empowerment objectives
Alignment on tariff methodology
and regulatory policy to create
regulatory certainty
Employees
Increase in labour productivity to deliver
on volume growth and MDS targets
Success ultimately depends on a broader South African
partnership and support
Performance

8. 7Strictly private and confidential
Outline
Transnet Strategy History
MDS
Transnet 4.0
Transnet Digital Business

9. 8Strictly private and confidential
Transnet must deliver growth opportunities aligned to the
Transnet 4.0 Strategy
5
Liquids and
gas (energy)
Facilitate access and
distribution of liquid and
gas energy resources
• Future of Transnet
Pipelines
• Link to LNG opportunity
• TIH – Africa play
Digital
Leveraging and monetizing
freight and infrastructure
related digital capabilities
• Examples: Fibre and telecoms,
data solutions, information driven
businesses
Compounded
organic growth
8.5% p.a.
inorganic
growth of R20bn
pa by 2020
2017 2018 2019 2020
67 73 79 86
20
67 73 79 106
Freight solutions
World class, competitive, and customer
centric end-to-end freight solutions
• Freight Rail and Port Terminals core
• Added capabilities and partnerships
(4PL etc.)
• TIH adds pan Africa dimension – port and
rail concessions
“100 by 20 in 3”
Advanced manufacturing
Africa’s own rail, ports, and
transport OEM
• Customer focused packaged asset
life cycle solutions (design,
finance, building, maintain,
replace)
• External: Internal 90:10 to 67:33
Infrastructure, spatial solutions,
maritime connectivity (local and
regional)
Creating and enhancing logistics eco-
systems to enable and accelerate
economic growth
• TNPA and Transnet Property driven
• Sea borne trade
• Port and inland hubs
• Large scale/high yield commercial and
transformation opportunities
• Optimize local, national and regional freight
logistics network
• Partner with stakeholders and private sector
(PSPs)

10. 9Strictly private and confidential
How is Transnet responding?
Agile
Fit and focused in a volatile
world
Admired
Trusted, innovative South
African brand
Digital
Evolve or die
United
Together we succeed

11. 10Strictly private and confidential
Outline
Transnet Strategy History
MDS
Transnet 4.0
Transnet Digital Business

12. 11Strictly private and confidential
Transnet Digital Business - Value Proposition
In line with the Transnet 4.0 strategy, Transnet Digital Business is in a process of developing and commercializing an
integrated digital products and services and exploit digital capabilities to offer value added services to customers.
Below are some of the benefits to be realized by our customers:
• Instant access to vital and credible information (operational and commercial) from
a single/central portal (from complexity to simplicity);
• Total visibility to supply chain "blind spots”;
• Enhanced customer responsiveness;
• Better stock management (JIT inventory);
• Decreased material and labor costs;
• Optimized logistics and transportation efficiency;
• Visualize the logistics supply chain, activities and delays
• Detect, predict and manage delays at any point in the logistics supply chain
• Consignment routing, timing and pricing options
• Plan, quote, book and track consignment

13. 12Strictly private and confidential
In conclusion
• Integrated ecosystems facilitate effective collaboration.
• Improve the complex logistics chains consisting of many actors.
• Quality analysis is impossible without the supply chain visibility, hence Transnet is embracing
4th Industrial Revolution new technologies to stay ahead of the game,
i.e. Internet of Things (IoT) and Machine Learning, Drones, Robotics, 3D Printing, Coding,
Artificial Intelligence, Big Data and Analytics.

14. Thank You
Mandla Mkhwanazi
Digital Business Leader
mandla.mkhwanazi@transnet.net